One of Maryland’s largest biotechnology companies is up for sale because investors expressed dissatisfaction with the company’s lagging stock performance.
Located in Gaithersburg, MedImmune Inc. has been a driving force for Maryland’s economy since it opened in the late 1980s. Estimated to be worth nearly $9 billion and with revenue reaching $1.28 billion last year, Medimmune employs more than 2,000 people in the state.
The bulk of its revenue stems from the drug Synagis used by children for infectious respiratory disease. MedImmune also manufactures Ethyol for reducing chemotherapy side effects.
The once-promising nasal spray flu vaccine FluMist, introduced four years ago, has produced poor sales, sparking shareholders’ concern. FluMist did not get out of the gate quickly because of problems with storage and has not been approved for children under 5 or adults over 50, limiting its market availability.
MedImmune also revealed in February a delayed filing for federal approval of a new version of Synagis, helping to push its stock down sharply.
“Indications of interest by major pharmaceutical companies, coupled with recent expressions by certain stockholders of dissatisfaction with the company’s short-term stock price performance, have led the board to authorize management to gather information regarding possible strategic interest in acquiring the company,” said spokeswoman Jamie Lacey.
MedImmune hired Goldman Sachs & Co. and the law firm Dewey Ballantine LLP to help with the possible sale, likely to a major pharmaceutical company. The potential loss of MedImmune would be a blow Maryland’s biotechnology business.
“MedImmune is a key player in the growing biotech sector in Maryland, and we are prepared to do everything we can to welcome and keep a new owner in the state,” said Dave Tillman, a spokesman for the Maryland Department of Business and Economic Development.
Talk of a takeover sent MedImmune stock shares up almost 13 percent to reach $43.75 on the Nasdaq Stock Market yesterday. Earlier this week, the company announced that it expects earnings to nearly triple when it reports first-quarter results next month.
Until late last month, however, the stock had spent a year hovering between $25 and $35, well below its high point of $80 in 2000.
The pressure to sell the company recently intensified when New York investment group Matrix Asset Advisors, which owns about 1.7 million shares of MedImmune, called for the sale of the company in three separate letters to the MedImmune board. And, in February, billionaire investor and corporate takeover specialist Carl Icahn bought 2.8 million shares of MedImmune stock.
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